Credit cards are one of the primary reasons people travel down the road to bankruptcy. They can be powerful tools to help manage money and enjoy rewards, but they can also be destructive and make it easier to get in much too deep, financially speaking.
If credit cards are causing you serious financial trouble, here’s what you need to know:
Budgeting
One of the most important things you can do to gain control of your finances and to get credit card use under control is to create a budget. Budgeting is so important the skill is actually taught during the bankruptcy process before someone’s case can move forward.
Budgeting helps you not treat credit cards as a substitute for cash you do not have. Responsible credit card use means you are paying off all of the balance at the end of each month. This ensures you avoid interest charges and do not overspend to the point you are never able to pay off your debt. One of the most obvious signs you are headed to financial disaster is only paying the minimum payment due each month on your credit cards. If you’re in this position, it’s time to take a look at your finances and figure out a way to pay down your debt and get hold of things before they are out of control.
For most people who get into trouble with credit cards, the problem is not what they spent, but what is added to what was spent. Running up too much credit card debt results in high interest payments, and various fees. You might think you can afford a few thousand dollars’ worth of credit card debt, but that amount can spin out of control in the blink of an eye.
There are a number of great budgeting tools available online to help you create a manageable budget that focuses on credit card payments. Not only do they help you plan to live within your means, they help you pay down whatever debts you’ve accumulated thus far. If you’re ready to put a plan of action into place check out these free budgeting tools from US News & World Report.
Credit Counseling
It might be tempting to ask for help from a so-called credit expert, but unfortunately, these services can make your situation worse. The credit counseling industry is so bad, many counselors are facing legal action for their unscrupulous behavior. There are people who can help you manage your credit card debt, but finding the right person requires you to do some research and weed out the unethical options.
It’s also important to consider your mindset when it comes to credit card debt. If you’ve been living care-free and more focused on spending than saving, chances are you’re headed down a dangerous path. Professional counseling about your credit might not even be necessary, if all that’s needed is a shift in priorities. There is never a better time than the present to have an honest heart-to-heart with yourself and really reflect on your spending habits. Consider your future goals (and how much money you’ll need to achieve them!) and decide once and for all if those goals are worth a change in your current spending habits.
If you are in need of help with credit card debt or things have gotten out of hand and bankruptcy might be your only option, we can help. Contact the law office of Frank J. LaPerch, PC at 845.942.5500 to schedule a consultation to discuss your money matters.
